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1. IMF, Structural Adjustment, and Poverty: A Cross-National Difference-in-Differences Analysis, 1980-2018

Author:
Shih-Yen Pan, Lawrence P. King, and Elias Nosrati
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The International Monetary Fund (IMF) has been one of the world’s most powerful international organizations in setting the parameters for economic reforms in the developing world. In this study, using data from 1980-2018 from 57 countries, we test competing hypotheses surrounding the impact of the IMF’s lending programs on poverty incidence in participant countries. Departing from the prevailing practice of relying on instrumental variables, we employ a novel difference-in-differences approach that ensures clean comparisons between “treatment” and “control” units based on their program participation histories. Besides providing a quantitative estimate of the average program effect, we evaluate whether the IMF’s alleged anti-poverty focus in recent decades has made any difference. We find that IMF program participation leads to large increases (3.6-5.7 percentage points) in the proportion of a country’s population living under the $3.65/day and $6.85/day international poverty lines (2017 PPP) and the countryspecific Societal Poverty Line. We also find that the poverty reduction measures incorporated by the IMF into its programs have not been effective in mitigating the poverty-increasing program effects. Overall, our findings show that IMF programs have been detrimental to the welfare of vulnerable populations in participant countries.
Topic:
Development, Economics, International Organization, and IMF
Political Geography:
Global Focus

2. Macroprudential policies and private domestic investment in developing countries: an instrumental variables approach

Author:
Bao-We-Wal Bambe
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper examines the effect of macroprudential policies on private domestic investment using a panel of 87 developing countries from 2000 to 2017. Our instrumental variables strategy exploits the geographic diffusion of macroprudential policies across countries, with the idea that reforms in neighbouring countries can affect the adoption or strengthening of domestic reforms through peer pressure or imitation effects. The findings indicate that the tightening of macro-prudential policies significantly reduces private domestic investment. This effect holds for both instruments targeting borrowers and those targeting financial institutions, and is subject to heterogeneity depending on several economic and institutional factors. The transmission channel analysis highlights that the negative impact of macroprudential policies on investment is primarily driven by a reduction in credit supply and financial inclusion.
Topic:
Development, Economics, Finance, Investment, and Macroprudential Policies
Political Geography:
Global Focus

3. Recent Global Business Cycles: Characteristics and Implications

Author:
Sang-Ha Yoon
Publication Date:
02-2025
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The analysis of economic patterns from late 1999 to 2023 reveals significant changes in how the world's economies connect with each other. Our research shows a clear trend toward more varied economic patterns, with regional and country-specific factors becoming more important than global influences. This shift became particularly noticeable after the COVID-19 pandemic, where we saw global factors having less influence on national economies than before. The study's findings have important implications for economic policy making. Countries need to develop flexible approaches that can adapt to both global and regional economic changes. At the same time, they must strengthen regional economic cooperation while maintaining domestic economic stability. The findings also highlight the importance of building better systems for responding to economic crises, while considering both regional and global factors in economic policy decisions. These changes suggest that the global economy is becoming more complex, with different regions and countries showing more independent movement than before. As this trend continues, the ability to balance global, regional, and domestic economic relationships will become increasingly important for maintaining economic stability and promoting growth.
Topic:
Economics, Business, Economic Growth, and COVID-19
Political Geography:
Global Focus

4. Digital Data and Advanced AI for Richer Global Intelligence

Author:
Danielle Goldfarb
Publication Date:
02-2025
Content Type:
Special Report
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
From collecting millions of online price data to measure inflation, to assessing the economic impact of the COVID-19 pandemic on low-income workers, digital data sets can be used to benefit the public interest. Using these and other examples, this special report explores how digital data sets and advances in artificial intelligence (AI) can provide timely, transparent and detailed insights into global challenges. These experiments illustrate how governments and civil society analysts can reuse digital data to spot emerging problems, analyze specific group impacts, complement traditional metrics or verify data that may be manipulated. AI and data governance should extend beyond addressing harms. International institutions and governments need to actively steward digital data and AI tools to support a step change in our understanding of society’s biggest challenges.
Topic:
Economics, Inflation, Artificial Intelligence, and Data
Political Geography:
Global Focus

5. From Ideas to Policy: Q&A with Ibrahim Awad

Author:
Omar Auf
Publication Date:
03-2025
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Is it possible to imagine, let alone move toward a different global political-economic order? Ibrahim Awad believes conferences and the exchange of ideas have a role to play in moving such a reality forward
Topic:
Economics, Political Economy, Politics, Neoliberalism, Interview, and International Order
Political Geography:
Global Focus

6. Childhood Welfare Exposure and Economic Outcomes for Adult Daughters and Sons

Author:
Robert Paul Hartley, Carlos Lamarche, and James P. Ziliak
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We investigate how length of time on welfare during childhood affects economic outcomes in early adulthood. Using intergenerationally linked mother-child pairs from the Panel Study of Income Dynamics, we adopt a nonlinear difference-in-differences framework using the 1990s welfare reform to estimate average and quantile treatment effects on intensity of welfare use and earnings in adulthood. The causal estimates indicate that additional childhood welfare exposure leads to more adulthood years on the broader safety net for both daughters and sons, yet this positive relationship only applies below moderate levels of adult welfare participation and reverses at greater levels of dependence. Increasing childhood welfare exposure implies lower earnings in adulthood for daughters, however we find no evidence that it depresses adult sons’ earnings. Both daughters and sons exhibit some wage penalty from childhood welfare exposure, yet only daughters are penalized through hours worked in the labor market.
Topic:
Economics, Income Inequality, Welfare, Labor Market, Gender, and Intergenerational
Political Geography:
Global Focus

7. Hard Times, Hard Attitudes? The Effect of Economic Downturns on Gender Norms

Author:
Inés Berniell, Leonardo Gasparini, Mariana Marchionni, and Mariana Viollaz
Publication Date:
02-2025
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper examines the impact of economic fluctuations on social norms, specifically exploring the link between changes in unemployment and shifts in attitudes toward gender roles in the labor market. The results are not immediately obvious, as the literature suggests several potential mechanisms with conflicting outcomes. Using microdata from the World Values Survey for a panel of 103 countries that cover close to 90% of the world population, we estimate individual-level probability models of agreement with traditional gender roles over the period 1995 to 2021, including country and year fixed effects. We find that an increase in unemployment is associated to more conservative views about gender roles in the labor market. This result is remarkably robust across different groups and specifications. We also find that some contextual factors matter. In particular, the link between higher unemployment and more conservative views on gender roles is stronger in countries with, on average, higher gender inequality and lower female labor force participation. Overall, this study contributes to a growing body of research on the complex relationship between economic conditions, gender norms, and social change.
Topic:
Economics, Unemployment, Attitudes, Gender, and Social Norms
Political Geography:
Global Focus

8. Good Intentions, Better Outcomes: Shifting the Debate About Social Protection and Informality

Author:
James Heintz and Jayati Ghosh
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The introduction of social protections for individuals engaged in paid employment frequently comes up against arguments that such measures would have an adverse impact on employment, reduce access to formal jobs, and result in greater informality. The argument is that, while well intentioned, such policies distort labor markets and generate significant economic costs that either leave some workers worse off than they would have been in the absence of such protection, or the interventions become a drag on overall economic performance, encumbering the process of development. In what follows we critically evaluate such arguments and provide responses to the claim that social protections lead to higher informality. We also consider the challenges involved in providing social protection to different types of workers, including not only those employed by others but specifically the self-employed and unpaid workers.
Topic:
Economics, Employment, Labor Market, Informal Economy, and Protection
Political Geography:
Global Focus

9. The Sky Is Not the Limit. Geopolitics and Economics of the New Space Race

Author:
Alessandro Gili
Publication Date:
01-2024
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
Space is a contested domain for its very nature and today it is evidently becoming an increasingly important enabler of economic and military power. An increasing number of actors, infrastructures and technologies deployed in space also raises concerns for safety and security, especially in cyberspace. Many countries are striving to achieve space capabilities and autonomous access to space, and this is having a tremendous geopolitical impact, especially since space is emerging as an increasingly critical military and strategic domain. The development of the new space economy, which is increasingly involving the private sector and many industrial actors and services, will also be a game changer for the international economy. The space race likewise implies disruptive technologies that could contribute massively to the energy and digital transitions, accelerating solutions that could benefit humanity. A new international governance system for space is therefore needed urgently, considering that the current rules are no longer able to respond to a sector evolving at such a rapid pace. Which actors are leading the race? Which economic sectors could benefit the most and what could the new space economy mean for the world? How is space emerging as a military domain against a backdrop of increasing international tensions? What would a new system of global governance for space look like?
Topic:
Economics, Politics, Infrastructure, Geopolitics, Regulation, and Energy Security
Political Geography:
Russia, China, Europe, India, Italy, Global Focus, United States of America, and Space

10. Navigating the treacherous political economy of structural reform

Author:
Davide Furceri, Jonathan Ostry, and Chris Papageorgiou
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
We examine the economic and electoral effects of liberalisation measures using newly-constructed databases on structural economic reforms and the outcome of democratic elections since the 1970s. The data shows a remarkable slowdown in the pace of liberalisation in both advanced and emerging market and developing countries since the 1990s. A debate has emerged about the causes of this slowdown, including the possibility that reforms do not deliver the economic benefits that advocates, including the multilateral financial institutions, trumpeted. Some have pointed to the fact that the current and previous United States administrations have abandoned neoliberal policies in favour of more government intervention in the economy, and the effect has been globally contagious. Our empirical analysis suggests that the growth dividend from liberalisation is economically and statistically significant, but it emerges only slowly over time. Because of this delay, liberalising reforms are costly to democratic incumbents when they are implemented close to elections. Reforms may generate immediate concentrated losses, which elicit an electoral backlash, especially when the aggregate gains are only visible several years after the reform’s implementation. The electoral penalty is also sensitive to overall business-cycle conditions, being much larger when an economy is in recession. Electoral effects also differ depending on the type of reform. Notably, financial reforms generate more perceptible growth-equity trade-offs than real-economy reforms, especially when implemented during weak economic conditions. The political economy of reform is treacherous. To avoid adverse electoral effects, timing reform early in the electoral term and when business-cycle conditions are favourable is critical. So too is avoiding reforms that generate large distributional costs in the face of small aggregate gains (an adverse growth-equity trade-off). Focusing on these considerations is critical to reinvigorate support for structural reform.
Topic:
Economics, Political Economy, Reform, Elections, and Liberalization
Political Geography:
Global Focus